
In my view, the housing market here in Orange County is entering a three to five year period of spring rallies and fall declines with prices likely to flatten. The low end may appreciate while the high end will likely come down. That makes me somewhat bearish, certainly not bullish, but neither do I believe we will see another 20% to 30% leg down in the market to match the one we already witnessed. The first drop in the market was necessary to adjust prices back to their historic relationship to rental parity. That decline was destined to be steep because the elimination of Option ARMs and interest-only ARMs caused a sudden and dramatic decline in loan balances. The second…[READ MORE]